News for trust-based schemes
Last year saw the introduction of new climate-related governance and reporting requirements for certain schemes, including larger occupational pension schemes. The rules initially apply to authorised schemes and those with relevant assets of £5 billion or more, but will also start to apply to schemes with relevant assets of £1 billion or more from 1 October 2022. The DWP has said it will consider whether to roll the rules out to smaller schemes in 2023.
The DWP published statutory guidance for trustees in complying with the new requirements, with TPR publishing complementary guidance which sets out what trustees need to do and report on in their annual climate change report (known as a TCFD report).
In February 2022, TPR published an illustrative example showing how trustees of a fictitious scheme might approach meeting the new requirements. Although the case study is detailed, TPR emphasises that it is not intended to be used as a checklist by trustees. It is intended to help develop understanding of how trustees and advisers might approach implementing the requirements of the new regulations at a practical level. The example provides information relevant to trustees and advisers of any scheme seeking to comply with the new regulations.
TPR has also suggested that the new example and final guidance will be helpful to those running schemes who are not in scope of the rules, but who want to do more to manage climate-related risks and opportunities.